Ratifying the EU-Mercosur Trade Agreement will give the EU “increased leverage” over South American countries’ environmental policy, thereby offsetting the negative environmental impacts of the deal.
That’s according to the government’s Economic and Sustainability Impact Assessment of the deal, which was published last week.
One of the key concerns of farm organisations has been that the increased tariff rate quota (TRQ) for beef from the Mercosur bloc (comprising Brazil, Argentina, Uruguay and Paraguay) of 99,000t would see an increase in deforestation, particularly in Brazil, for the purpose of increasing agricultural land there.
However, the assessment played down these concerns, arguing that any increased beef production in Brazil arising from the deal would be negligible compared to the country’s overall beef production.
It also argued that ratifying the deal – as opposed to refusing to do so – would be of greater overall environmental benefit in a global context, as it would allow the EU exert pressure on Mercosur countries to achieve “desirable policy changes” on environment and climate.
The assessment notes that “most, if not all” major Brazilian beef exporters to the EU have signed up to the “so-called” Trading Accreditation Council (TAC) under which they commit not to purchase cattle from illegally deforested holdings in the Amazon Rainforest.
Although the assessment says that it is “beyond its scope” to examine how this would work, it did argue that “a comprehensive tracking system must be important for processors to be sure that are buying cattle that comply with the commitments” under the trade agreement.
The assessment document claims that “no arguments” have been found to support the suggestion that refusing to ratify the deal would ensure support for and engagement with the TAC.
It goes on to argue that the ‘Trade and Sustainable Development’ (TSD) chapter of the trade agreement “would provide for a set of mechanisms that give the EU some leverage to ensure that commitments are met”.
On the question of increased production, the Mercosur countries will use around 50,000t of the additional 99,000t under the new TRQ for beef if the deal is finalised, of which 20,000t will come from Brazil, according to the assessment.
Brazil’s overall annual beef production is around 11 million tonnes. Using these figures, the assessment assumes that the maximum increase in production of beef in Brazil as a result of the new TRQ on beef would only be 0.2% of its current production volume, after the six-year ‘phasing-in’ period of any ratified deal.
However, the assessment notes that the economic modeling on the impact of the deal does not assume any increase in land use for agricultural purposes and that the increased production in Mercosur countries occurs on already-existing agricultural land.